NPI Essential for Business Results, Yet Generally Ineffective

New product introduction (NPI) is a linchpin process in most corporations and industries. NPI is key to competitiveness, revenue growth, and customer retention. Given the importance of NPI to overall corporate success, it’s no surprise that manufacturers devote considerable cost and effort to it. According to our most recent data, the median manufacturer involves 25% of personnel in NPI and has a new product cycle that lasts 24 months on average. Despite the substantial investment, NPI often fails to deliver expected outcomes. Forty-four percent of NPIs fail to meet all or even most success criteria.

Many quality leaders have recognized that imbuing a culture of quality is critical to achieving quality objectives and desired outcomes. In fact, LNS Research identifies that 37% of quality leaders (n=1198) cite a lack of quality culture as the top roadblock to achieving quality objectives. Naturally, culture initiatives are common and emphasize that the corporation must transition to a more proactive quality approach. One critical element to culture initiatives is early and effective engagement in new product introduction (NPI). However, most of the market lacks early and effective engagement of quality processes, insights, and competencies within NPI, and quality teams often struggle to justify a change .

Agility, adaptation, and innovation are prized commodities in today’s business climate. Disruption is top of mind because it is a genuine opportunity and risk. Today’s manufacturers are exposed to unprecedented external forces, but also have the potential to access unprecedented insights. These insights can lead to innovative products, achieve new levels of quality and productivity, and create innovative new customer experiences. The end effect is that highly agile, and digitalized startups have managed to topple established industries and manufacturers that have been slow to adapt.

On Thursday, May 17, LNS Research hosted the webcast, “Keys to Successful New Product Introduction (NPI): Bridging the Digital Quality Divide.” The presentation explained why market dynamics force companies to rethink NPI and how leading companies drive innovation in today’s digital world. The discussion included an examination of why today’s NPI success rate is relatively low, and why market trends inhibit NPI success.

Is manufacturing new product introduction critical for organization?  Developing profitable, timely, high-quality products is more important today than ever before. Visibility to product performance has never been higher, while competition continues to squeeze margins and time to market. These market dynamics, among others, are increasing the pressure on product teams.

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Over the past few months, we’ve been helping many LNS program members with strategic planning for 2018, and underlying this planning is a common theme - “What is the perceived value of quality?”

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2017 was a challenging year for quality. Many manufacturers had to evolve their quality management system due to changes in standards and compliance requirements, providing an opportunity to rethink processes, organizations, and leadership support.

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It's no secret that companies that benchmark performance against actual practices in operations, quality, environmental, safety, risk management, energy, and many others are able to drive and sustain higher performance levels, and contribute meaningful value to enterprise objectives.  Even companies that are long-time pros at benchmarking performance in these areas often struggle to pinpoint best practices that have a beneficial impact on new product introductions (NPI).  When so much is at stake, what's holding them back?

The fact is, the pressure is on and growing for manufacturers: